Question
Asked Oct 7, 2019
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Thelma and Louie, Inc. started the year with a balance of retained earnings of $545 million and ended the year with retained earnings of $590 million. The company paid dividends of $35 million to the preferred stockholders and $75 million to common stockholders.

 

Calculate Thelma and Louie’s net income for the year.

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Expert Answer

Step 1

O = Opening balance = $ 545 mn

C = Closing balance = $ 590 mn

Total dividends paid = $35 million to the preferred stockholders + $75 million to common stockholders = $ 110 mn

Let NI be the net income during the year.

Step 2

Connecting equation is:

O + NI - D = C

Hence, NI = C + ...

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Finance

Financial Statement Analysis

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